The changing role of the IT department
Topics: Information systems strategy IT competence Digital transformation By Leif Jarle Gressgård
As IT is increasingly embedded in products and services, customer and supplier relationships, and business processes [1, 2], the role of the IT department expands to impact core functions and business strategies [3]. This may require changes in work processes, structures, and competence requirements.
For example, when studying digital innovation challenges of incumbent organizations, Svahn et al. [4], describe how the responsibility of the IT function in Volvo Cars changed from an internal support unit to be assigned product responsibility with strategic importance. The IT department may be an internal source of design and development competence relevant to digital innovation processes, as its maintenance tradition involves continuously release of products, services, and updates (and hence can be related to the nature and logic of digital innovation).
Changing the role of the IT function may be challenging, however. IT departments may experience significant tensions between support of transformative activities for digital value creation vs. traditional focus on providing IT services to increase operational efficiency [5]. This latter function requires stability, reliability, and exploitation of existing resources, while transformative activities involve exploration, risk and uncertainty. Gregory et al. [6], for example, discuss in this regard how IT managers have to:
- balance short- and long-term goals
- blend IT and business interests
- dynamically balance different needs in the organization.
IT departments must manage opposing demands for speed and stability. They should hence emphasize development of capabilities to perform explorative and exploitative activities simultaneously. A study by Tai et al. [7] shows that such capabilities positively influence operational support - which is an aspect of IS-business alignment - and refers to the degree to which the organization’s information systems improve the efficiency of day-to-day business operations, support effective coordination across functions and product lines, and enable the users to perform detailed analyses of present business situations. To improve this aspect of IS-business alignment, organizations should simultaneously:
- adjust existing IT applications on a regular basis and frequently refine the provision of existing IT applications
- ensure that IT supports demands that go beyond existing needs, plan for extension of IT applications, and regularly search for new IT applications in business operations.
To achieve IS-business alignment, IT departments should also recruit or promote IT personnel who are characterized by understanding business situations, acquiring new technology skills, and interacting with users [7].
IT departments should create routines that enable them to create the technological platforms needed for their organization. This is positively related to organizations’ capacities to respond with speed to environmental changes and opportunities (i.e. organizational agility) [8]. In order to do this, IT departments should ensure that their systems delivery process
- is adaptable to different projects.
- is continuously improved by using formal measures and feedback systems.
- has adequate controls to achieve development outcomes in a predictable manner.
- is flexible and allows infusion of new methods, tools and techniques.
- focuses on reuse of software assets such as design, code and specifications.
- is mature, well defined and documented.
References / sources
- IT centrality, IT management model, and contributions of the IT function to organizational performance: A study in Canadian hospitals.
Paré, G., Guillemette, M.G. & Raymond, L. (2020). Information & Management, 57(3). - Digital business strategy: Toward a next generation of insights.
Bharadwaj, A., El Sawy, O.A., Pavlou, P.A. & Venkatraman, N. (2013). Management Information Systems Quarterly, 37(2). - The changing role of IT in the future of business.
Newman, D. (2016). Article at Forbes.com. - Embracing digital innovation in incumbent firms: How Volvo Cars managed competing concerns.
Svahn, F., Mathiassen, L. & Lindgren, R. (2017). Management Information Systems Quarterly, 41(1). - Reinventing the IT function: The role of IT agility and IT ambidexterity in supporting digital business transformation.
Leonhardt, D., Haffke, I., Kranz, J. & Benlian, A. (2017). Proceedings of the 25th European Conference on Information Systems (ECIS), Guimarães, Portugal. - Paradoxes and the nature of ambidexterity in IT transformation programs.
Gregory, R.W., Keil, M., Muntermann, J. & Mähring, M. (2015). Information Systems Research, 26(1). - A study of IS assets, IS ambidexterity, and IS alignment: The dynamic managerial capability perspective.
Tai, J.C.F., Wang, E.T.G. & Yeh, H-Y. (2019). Information & Management, 56(1). - Exploring the relationships between IT competence, innovation capacity and organizational agility.
Ravichandran, T. (2018). The Journal of Strategic Information Systems, 27(1).
Photo by Kaleidico on Unsplash
Other relevant external content:
The past, present, and future of the IT department - article at CommsBusiness.co.uk.